Rumors have abounded in international press in recent weeks that Mexican mobile holding company América Móvil is in talks to acquire Central American cable operator Amnet. If it proves to be true, the move could pave the way for a quadruple play offering and stronger business in Central America, analysts told BNamericas.
Amnet, which is owned by US-based telecoms holding company Amzak International, offers subscription cable TV, digital TV and broadband internet in Costa Rica, El Salvador and Honduras.
Such an established network would significantly facilitate AMX's rollout of quadruple play services without too much additional infrastructure investment, according to José Otero, president of consultancy Signals Telecoms Consulting.
"They would be able to offer quadruple play directly without any partnership, without any satellite company and without having to reach houses with IPTV," Otero told BNamericas.
AMX operates its Claro mobile unit in Guatemala, El Salvador, Nicaragua and Honduras, and also has fixed line assets in three of those countries bar Honduras, which it inherited when it acquired local telcos to set up its mobile business there.
The acquisition would enable AMX to see synergies between its Central American operations and recently established Caribbean operation. The company completed acquisitions of US telco Verizon's assets in the Dominican Republic (Verizon Dominicana) and in Puerto Rico (PRT). AMX could then benefit from management and on network calling synergies between its Central American networks, Otero said.
Throughout Central America, AMX had 5.88mn mobile and 2.16mn fixed line subscribers at the end of 2006, a 48.9% leap over the previous year. Revenues from Central America in 2006 were US$1.49bn.
Sergio Rodríguez, analyst with corporate ratings firm Fitch Ratings México also said that if the deal were to come off, it would strengthen AMX's position in the region.
Rodríguez said he did not think AMX's current plans to acquire a controlling share of Telecom Italia would have any impact on the decision whether or not to buy Amnet.
"Putting the TI deal into context, it is the bigger deal," Rodríguez said, adding that he still has some doubts as whether or not that deal will go ahead.
For Otero, Central America holds plenty of growth opportunity due to the low mobile penetration and limited amount of competition. AMX's main regional competitor, Spain's Telefónica, is only active in the mobile market, Otero added.
In recent months AMX has focused its attention on Central America. AMX's owner Mexican telecoms magnate Carlos Slim met with the presidents of Nicaragua and Honduras during which he promised investments of US$250mn in Nicaragua and US$150mn in Honduras through 2009.
The acquisition would also give AMX an important entry into Costa Rica, which it currently lacks, according to a research note from US-based consultancy Global Insights. Moreover, having a presence in Costa Rica could come in handy if the telecoms industry is ever opened to competition. Currently state-run energy and telecoms operator ICE has a monopoly on the fixed line and mobile industry.
For its part AMX has not said anything about the deal and a company spokesperson declined to comment when contacted by BNamericas.
WHY NOT TELMEX?
While AMX's sister company Telmex normally takes charge of fixed line operations for Slim's telecoms companies, Rodríguez believes AMX may take charge of fixed line operations it inherited in Central America, while leaving the fixed line and pay TV markets for South America and Mexico to Telmex.
AMX's entry into both Central America and the Caribbean came under conditions that prohibited separating mobile and fixed line operations, Otero said.
"Telmex is aiming to be more of a major player in major markets such as Brazil," Otero said.
Telmex has been most active in Colombia recently, where it has purchased or agreed to acquire five cable operators, giving it around 54% of the cable TV market and a vehicle for triple play rollout, according to the local press."
Posted to the site on 23rd April 2007
Posted to: www.cellular-news.com/story/23324.php